Wellmark says no to exchange - for now

Too much unsure in new health care law, insurance giant says

Jul. 2, 2013

Daryl Thuringer

Written by

One major health insurer won’t be an option next year for South Dakotans buying coverage on the new health exchanges.

Wellmark, the Blue Cross and Blue Shield provider for South Dakota and Iowa, announced Monday that it won’t offer coverage on the exchanges until 2015.

The exchanges were set up by the federal Patient Protection and Affordable Care Act to provide an online marketplace where individuals without health coverage can purchase insurance and gain access to income-based subsidies.

In a news release, Wellmark said there are too many unknowns to participate in the exchange right away.

Laura Jackson, a vice president at Wellmark, said one barrier is a federal rule requiring large companies who provide individual coverage to also participate in a parallel exchange for small businesses. That, Jackson said, would be a complicated maneuver the company doesn’t want to rush — especially since Jackson said the requirement might change by 2015.

Wellmark’s decision probably won’t leave South Dakotans who use the exchanges high and dry. Several other large insurers are competing to offer coverage through the exchanges, including the plans from both Sanford Health and Avera Health.

“It seemed like a natural decision for Avera to be in this,” said Daryl Thuringer, vice president of marketing and public relations for Avera Health. “Avera has supported insurance coverage for everyone for many years. As a mission-driven organization, it’s important that people have the access to health care that they need.”

'Variety of options'

Ruth Krystopolski, president of Sanford Health Plan, said offering a “variety of options” to individual and business customers is a good move.

“Each individual and business needs to make the decision that’s right for them, and we want to make sure we’re an option for them,” Krystopolski said.

Sanford considered holding off on the exchange, as Wellmark ended up doing, but decided against it.

“We did explore that as an option, but did believe that it was important for us to be available,” she said.

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Insurers submitted their requests to join the exchanges several months ago. The U.S. Department of Health and Human Services will announce the participants in South Dakota’s exchange, and their rates, later this year.

S.D. opted out

South Dakota’s health care exchange will be managed by the federal government after Gov. Dennis Daugaard decided it would be too expensive for South Dakota to run its own exchange as some other states are doing.

“We have seen that the federal government’s implementation of the health care law is a very rocky road,” Venhuizen wrote in an email. “The impacts are very unpredictable, which is why the governor continues to oppose this law.”

A spokesman for the U.S. Department of Health and Human Services, Fabien Levy, said in a statement that the department is “working hard to create a competitive (exchange) in every state across the country.”

Americans will be able to start signing up for exchanges later this year, and there will likely be changes in rates as the law takes effect.